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Middle East markets have digital edge over Africa’s mobile-focused banking offerings says report

  • Changing customer behaviour and demands will have the highest impact in retail banking according to over two-thirds of Middle Eastern and African retail bankers vs 58% globally
  • Middle Eastern and African banks see the biggest impact coming from payment players (cited by 42% of survey respondents) and technology and e-commerce disruptors(39%)
  • Across the Middle East and Africa regions, 52% of bankers surveyed cited lending and leasing as the main area where they expected new entrants to gain market share
  • Survey respondents are primarily focused on developing niche propositions (65%) and developing banking as a digital ecosystem (57%)

GENEVA, Switzerland – 20 December 2018 Middle Eastern and African banks are reviewing their digital strategies in an effort to lower costs, attract the young populations and increase access for the unbanked populations.  Banks across both regions prioritise customer demands (68%), new technologies (48%) and the impact from new competitors (40%) according to an in-depth study written by the Economist Intelligence Unit (EIU), which was released today by Temenos (SIX: TEMN), the banking software company.

The EIU report entitled “Whose customer are you? The reality of digital banking in the Middle East and Africa”,  explores the developing situation for retail banks in the Middle East and Africa region and derives from the recently launched global report conducted for Temenos by the EIU. The report emphasizes the need for Middle Eastern and African banks to further develop their digital banking efforts in order to improve their products and services and attract new customers who may have never banked before.  The report also notes that Middle Eastern regional governments are establishing technology hubs and African regulators are improving consumer protection. 

Renee Friedman, the editor of the report from the Economist Intelligence Unit, stated,

“The markets of the Middle East and Africa are very different in terms of their development. But, given their common features of young and growing populations and high smartphone penetration rates, the opportunity for banks and fintechs to collaborate to bring digital and mobile banking services to the unbanked and the under-banked is enormous.”

Jean-Paul Mergeai, Temenos managing director, Middle East and Africa, said:

“The Middle East and Africa banks are embarking on digital transformation cycles to meet rapidly evolving consumer demands and fight off competition from new market entrants such as payments players. The banks realize that an end-to-end digital renovation is required to offer frictionless customer experiences, gain operational excellence and innovate at scale.”

Key report highlights:

  • Middle East and Africa bankers remain more focused on migrating client usage to digital from physical channels, with 63% citing this as their top strategic priority.
  • Retail banks across these regions are focusing their digital investment mostly on two areas: individual delivery capabilities (through internet, mobile devices, etc) and improving performance and scalability through cloud-based technologies, both cited by 57% of bankers.    
  • Fewer Middle East and Africa regional bankers think more payments will flow outside traditional banking networks (66% vs. 76% of global respondents).
  • Only 31% of see open hub initiatives as part of their innovation strategy; this may be a mistake as global experience shows banks can compete with fintechs if they collaborate on the underlying open banking technology.

Temenos Press Contacts 

Jessica Wolfe & Damien Fletcher

Temenos Global Public Relations
Tel: +1 610 232 2793 &  +44 20 7423 3928
Email: [email protected]

Alistair Kellie & Andrew Adie

Newgate Communications for Temenos
Tel: +44 20 7680 6550
[email protected]